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George Acs  

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  • Correction? What Correction? [View article]
    Thanks, I think.

    Yes, the Russians are a fine people, it's their past and current governments that I question.

    Other than a belated entry into World War II, which only came about as their trusted partner, Germany, violated the Molotov-Ribbentrope Pact, most people would be hard pressed to identify an instance of Russia (or the Soviet Union) being on the right side of history with regard to foreign policy.

    I agree about smoking and tobacco being pretty filthy, but have written before why I'm not bothered by the investment in such a company, as long as its not part of an IPO or secondary offering.

    Situational ethics works just fine for me.

    Before Larry Ellison Oracle was on auto-pilot, but now it has become a game again and I suspect that he's all in, at least until the next good earnings report, at which point his attention will again get diverted from the mundane business of business.

    Apple is taking advantage of having all the money they need. Was Jobs a visionary? Sure, but he also needed to be one and get his vision to the marketplace, even if it had some product failings. Cook doesn't have the same need to create annuity income flows to keep the machine running. He can afford to wait and get the product right. Let the others bring watches, bigger screens etc to the market place and do all of the hard consumer testing.
    Sep 14, 2013. 12:31 PM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Thank you.

    There are a couple of sectors that I don't follow. Utilities and communications are rarely appealing to me and then as a group I stay away from REITs

    I haven't owned any ever since I started using a covered option strategy, because they tend to have very low option premiums and not because of any underlying deficit in the products

    Purely from a hypothetical perspective the inverse relationship between REITs and interest rates has been suggested, but that relationship isn't completely carved in stone, partially because much of the data collection was during a sustained secular period of declining rates. There may be correlation, but validity may not be quite as certain, particularly during rising rate periods. There just isn't that much data during such periods of time.

    Additionally, some sectors may perform better than others. For example in a rising rate environment the inference may be that the economy is heating up, in which case residential and office REITs may reflect rising demand, whereas healthcare REITs may suffer.
    Sep 14, 2013. 10:51 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Thanks, I wish I had the patience to actually do the photo editing better. Oh, and the skill, too.

    As far as the editors go, they've been wonderful to me, letting me publish what are essentially "non-value added" articles on a regular basis and they've done so always in a really timely fashion.
    Sep 14, 2013. 10:38 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    If I wanted euphoria I'd be shoving ecstasy all day long (instead of just between the hours of 4 and 6).

    Even then, it's sometimes hard to not want to be in full party mode. Even having Greenspan warn us of "frothy exuberance" wasn't enough to have some sanity re-enter the landscape.

    One of the reasons that I really like covered options is that to a degree it eliminates greed from the equation. You're constantly taking small profits instead of waiting for stocks to continue going higher and higher. It's a little harder in terms of always having to identify potential candidates, but luckily sectors and individual stocks don't always move in unison and there does tend to be some kind of cyclic pattern for many stocks.
    Sep 14, 2013. 10:34 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    It is certainly true that individual stock prices fluctuate more than the market, but isn't your thesis predicated on identifying markets and not stocks? What is the basis for the thesis behind purchasing stocks in advance of signicantly more anticipated market declines?

    Actually, on the basis of your earlier comment that pinpointed the precise bottom to the May 21st top and then suggested that your returns exceeded the S&P 500 by 47% does seem to constitute a claim. Annualizing the claim really is an example of compounding, but in this case, not in a good way.
    Sep 14, 2013. 10:29 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Selecting the precise bottom of the mini-correction is impressive, however, annualizing returns on the basis of having done so is not, particularly since opportunities to capitalize on such entry points are not common, as you previously suggested.

    If you expected a 10% correction then why did you "place orders accordingly" after only a 5% correction? That's a pretty big margin and it makes the claim of having timed purchases specifically on the basis of a market thesis so precisely a little suspect.
    Sep 14, 2013. 10:02 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Well, there hasn't been too much to detect since April 2012, when the market went down about 9%. The small 5% drop in May 2013 was really a blip and pretty inconsequential, unless you were a very short term trader. For most it was a non-event.
    Sep 14, 2013. 09:28 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Can CLF do so? Absolutely, if recent past history is any guide

    However, will it do so? I think that in the absence of any return to the slew of bad economic outlook reports from China it will continue heading higher or at least trade in the $21-24 range until a catalyst is at hand.

    As someone who trades in covered option positions my preference is trading in a narrow range, so I don't have the requirement that CLF shares appreciate. I'm more than happy to see them stay where they are.
    Sep 14, 2013. 07:40 AM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Like lots of things that end up being big you don't realize so if the process is insidious. A correction needn't be a plunge and the response to a correction, that is amassing cash, needn't be accomplished overnight.

    Caution can be a double edge sword but I think that it is simpler to make up for profits missed by not being fully invested than to re-grow assets after having been fully invested through a correction.

    After all which is easier? Making a $10 profit on your $100 or making $10 on your $90? It's the same $10 but if your assets shrink to $90 after a correction the climb higher is more challenging.
    Sep 14, 2013. 07:37 AM | 3 Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Unfortunately anxiety has not yet translated into volatility and premiums, by and large, aren't as appealing as in the past.

    While I like selling puts, I don't do so anywhere near as often as covered calls. In part it's because I also like generating dividend streams. That is one of the frustrations of this week, in that the two potential dividend plays for the coming week, Safeway and Las Vegas Sands, just went up too much this week to make the capture of the dividends worth the added risk of dealing with their acute share appreciation.

    I rarely have a week pass without an existing or new holding going ex-dividend, so I'm going to be forlorn next week.
    Sep 13, 2013. 06:32 PM | Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    As quickly as the market reacted to what appeared to be at the very least a delay to any armed action in Syria, it will certainly react to any suggestion that the proposed resolution is doomed to fail.

    My guess is that not only would the gains from this week be erased, but then some.

    Congress is always the gift that keeps giving. Since I like bouncing markets, I like it when Congress is at its dysfunctional best. I'm glad they're back doing the people's work.
    Sep 13, 2013. 06:26 PM | 2 Likes Like |Link to Comment
  • Correction? What Correction? [View article]
    Funny how anxiety levels can change from second to second and from one anticipated event to its reality.

    Also, you may or may not know this, but algorithms often don't fall prey to anxiety. They have their own issues.

    I do agree with your basic observation in that there are many buyers out there waiting and who may be able to put in support with even the most modest of dips. However, the balance can be very fragile. Whether it's the right constellation of events or some arcane technical indicator that is the root cause, corrections are a normal part of market dynamics. What has been less normal is going for a 17 month period with no meaningful pause after having gained more than 30%.

    The last time there was a similar higher and sustained move in the market the eventual correction came suddenly (April 2010) and was approximately 14%. Back then, it could just as easily been said that there were willing buyers but a paucity of sellers until that was no longer the case.

    As a covered option trader my preference would be a market that simply meanders, regardless of its level.
    Sep 13, 2013. 05:26 PM | Likes Like |Link to Comment
  • I Bought Apple [View article]
    The move from $700 to $585 actually took 7 weeks, but I bet it did seem like it was overnight.

    Human nature makes the buy and hold investor go into a state of suspended animation and denial as paper profits are evaporating.

    Been through it more than once. It's often death by a thousand cuts rather than falling off a cliff. By the time you face reality it's all gone.

    The fact that you sold 50% of your shares probably put you way ahead of so many others who bought into the group think that shares were going to $1,000.

    When I wrote some article more than a year ago that were questioning Apple's ability to keep going higher the comments were universally vocal and highly critical. I'll venture that lots of those people saw their gains disappear without taking the opportunity to at least cash in some of their shares.
    Sep 12, 2013. 09:16 PM | 1 Like Like |Link to Comment
  • I Bought Apple [View article]
    I'm a big believer in not having regrets. I have to be if relying on a covered option strategy.

    Ultimately, the question becomes one of probabilities and one of comparisons.

    You always remember the home runs and especially the ones that got away from you, like Netflix. But for most stocks the probability of a home run is very small. If you look at enough charts that fact is clear. The ones that go up in a straight line are memorable, but exceedingly rare. Not only are you counting on something rare to occur, but then you're also counting on the inner strength to resist greed and to sell shares to take your profits. Just look at how many bought still held Apple at $700 thinking it was bound for $1,000.

    Then, if you can't get rid of the greed thing, instead you have to have perfect timing to recognize when the shares are at or near their peak. You also have to deal with the denial that hits when shares start to drop from their peak and you didn't sell, because you think shares will bounce back.

    Better to take the sure profit.

    On the other had, take a look at enough charts and you'll see an untold number of smaller rises higher, and lower, and then higher again. For most stocks, over time, the bias is higher, but it comes as the result of many incremental moves.
    So the question is whether the sum value of your homeruns minus the value of missed opportunities while awaiting those homeruns exceeds the cumulative value of those incremental moves, the singles.

    I happen to supplement the incremental moves with option premiums and in the process of moving in and out of stocks in somewhat of a cyclical fashion, tend to collect dividends at a higher net yield than the S&P 500 ordinarily offers (currently about 2%, compared to about 2.9%)
    Sep 12, 2013. 02:51 PM | 1 Like Like |Link to Comment
  • I Bought Apple [View article]
    That's very true. However, what happened to the half of your AAPL piece that you didn't sell at $637? More precisely, what happened to the paper profits that could have been achieved from shares that were up nearly 150%.

    That is the failure of buy and hold for very many. While you say that you're keen to buy on dips, the buy and hold investor is often plagued by the dips.

    In the case you presented I could understand someone's logic that with a $370/share gain in essence the sale of 50% of shares resulted in recouping the entire outlay, so that you are "playing with the house's money," but what of the smaller 5% aliquot sales from the piece purchased at $425?

    It would seem that you don't expect dips, as you're still holding a 95% position, despite them having appreciated about 20% at their peak. In that case you have your profits at risk for such adverse movements as yesterdays.
    Sep 12, 2013. 02:40 PM | 1 Like Like |Link to Comment
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